Pages

4.04.2013

Why the City Pages are Silly

It's a spring-time tradition. When Spring Break arrives, I say goodbye to my students, make a few Arrested Development jokes with my colleagues, and pick up as much as I can find on the impending baseball season

This year, in addition to the standard season preview issues of Sports Illustrated and ESPN, I also picked up the City Pages, on the basis of it's ominous headline "Baseball's Fiscal Cliff: As another season begins, MLB faces an unsustainable future--and you're picking up the tab". (Certainly a title capable of grabbing attention, and the whole article is available here)

Credit: City Pages

The fiscal cliff referred to by author--Pete Kotz--is based on 4 clear points (with the emphasis and dire headline being based most clearly on the 4th point)

Baseball is beset with competitive imbalance

To Kotz's mind the more popular NFL and NBA help their sports thrive by helping teams thrive in middle-markets like Green Bay and San Antonio, while grand ol' game is trapped in a recurring cycle where "the big crush the small with painful regularity".

Baseball is losing its fan base (particularly among young men)

You can see the diminishing fan base in the graph at the right. The audience for a typical World Series game has shrunk by 29.6 million eyes from 1980 to today. Including the surprising stat that "More women age 50 and older watched the world series did men under 49".

The largest financial gain for baseball is its lucrative tv contracts which will soon come under threat from increased demand for better product

It's no surprise that Sports are lucrative for broadcast networks to air (no one lines up to watch March Madness stunners on hulu the day after). So there are multiple millions if not billions in the offing when teams agree to broadcasting contracts. However the companies that own your local teams' broadcaster (Time Warner/Disney/Viacom/News Corps) are able to recoup the oodles they pay for baseball by making satellite and cable companies sell lower rated channels like Disney XD along with ESPN or FUEL Tv alongside Fox Sports North. Of course the satellite and cable companies pass that cost on to consumers.

But with the rise of on-line watching, Kotz argues, all viewers are increasingly likely to switch off the tv unless things change, and bills (which may soon top $200/month) drop. (Perhaps through an anti-trust suit from Viacom which seeks to eliminate the channel-bundling and sell channels to consumers individually.)

If the cable contracts change, the tv contract bubble will burst, competitive imbalance will become entrenched and the few remaining fans will have to pay exorbitant prices in order to ever see a winner again.

This is the core of Kotz's case. If you can buy individual channels, those who want family fare (like Disney Channel) but not sports will spurn the extra cost on their cable bill and, as he sees it: "[b]aseball's welfare payments from non-fans will corrode. And with an audience in decline, remaining subscribers will be forced to spend that much more to compensate." Thereby leaving poor teams like the Twins charging fans more both at the turnstiles and on the cable bill to make money, hire players and win games.

This is an argument. But as I see it, it has a couple of clear flaws too.

Baseball is rife with parity

This would be Jayson Stark's turf, so I won't really get into this too much, I'll just to trot out perhaps the best stat of all: 12/32 NFL teams have won a Super Bowl in the last 25 years, by contrast 16/30 MLB teams have won a World Series over the same time span...yup, you've got no chance if you aren't the Yankees

Baseball's fan base cannot be judged by World Series ratings

True, but irrelevant. Credit: CityPages

To be sure, baseball's World Series' ratings are embarrassing. But they are less embarrassing when you consider how baseball does in other venues.
News reports point out that daily viewership of local teams is fairly constant within most media markets. Take the Tigers: they get about 168,000 people tuning in to tv each day, plus 199,700 people tuning into the radio, that'll be 367,7000 people tuning in each week...just within Detroit. (The Lions draw from a national audience to try to match that in one day).
On top of that, you should consider the fact that baseball's long season enables a near constant conversation about the games on social media and the internet. "Detroit Tigers Blogs" kick out 40 million hits on google, "Detroit Lions Blogs" kick out about 24 million hits. (Heck the Twins even crush the Vikings (about 22 million to 19 million...AND THE TWINS STUNK WHILE THE VIKINGS MADE THE PLAYOFFS)
The truth is that, while national ratings are down, local interest is up. Would it be nice to see the World Series return to its bygone glory? Yes it would. But do woeful World Series ratings mean baseball is doomed? Absolutely not.

Lucrative tv contracts are undoubtedly valuable, but are not the only factor in making a team competitive

Naturally local markets can pay more if they have more subscribers (Angels and Yankees broadcasting contracts are going to pour more money into the teams they're paying than local broadcasters in say, Oakland and Tampa Bay).
Nevertheless, as the last decade worth of parity (see point 1) has made clear, you don't have to be swimming in tv contract cash in order to make your team competitive (witness the success of the A's and the Angels, or the Rays and Yankees). Teams have found ways to succeed without money before, and they'll seek ways to succeed without them now.

Who says that this is what will happen if the cable contracts change?

Here's the biggest problem I have with Kotz's article and the City Pages' fear mongering. They've given into what I tell my students is an "if...then fallacy". If one thing happens, then another will inevitably follow. You see it in presidential campaign ads (like...this one).

Credit: City Pages

But there's a problem with assuming that one action will invariably lead to atom bombs or war with moon nazis: there's no way to know whether or not this will really happen. Let's say Kotz is right and cable companies start offering the chance to buy channels individually rather than as a set. Why does that mean that customers will abandon sports channels rather than turning to them in greater numbers? (Personal example: the only non-network channels I watch are FSN, ESPN and Comedy Central anyway...so I'm in regardless; my younger brother can't afford cable, but if he could get the sports channels he wanted without paying hundreds of bucks for sports AND SoapNet/E!, he'd do it in a heart beat).
Or, if you prefer, if cable contracts change AND sports channels are abandoned, why does that mean that teams will be forced to charge regular fans more? Why won't it lead to a greater degree of fiscal restraint? The fall out from A-Rod's mammoth contract (and subsequent crapitude) has already largely flattened player's prices. Moreover, with 15 years of solid labor agreements behind them, the union has a good sense of what they can/should expect from management. If they know finances are getting crunched, they'll have to accept that and the lower salaries that come along with it.
However you slice it, there's just no guarantee that the so-called "Fiscal Cliff" is nearly as dire as Kotz and the City Pages make it seem.

There are problems with baseball. It's naive to argue otherwise. But should we really be bracing ourselves for a financial disaster that will doom us to decades of overpaying for the foreseeable future? Probably not.

I can see why the City Pages published the article ('tis the season, after all), but there's just no need to make a 125 year old institution that has weathered recessions, depressions and wars that minimized their workforce seem like it's going to be doomed because of a cable company's law suit? That's just silly.

No comments:

Post a Comment

Peanuts From Heaven

Our Founders

Welcome!

Welcome to our Twins blog. If you're looking for "facts" and "stats" you've come to the wrong place. If you're looking for sarcasm, threats of violence and illustrations involving the Beatles and the smoke monster from LOST, welcome!If you're just getting to know us, check out the Peanuts 101 Page at the top of the screen, and feel free to review our Declaration of Principles.

Disclaimer

Peanuts From Heaven Incorporated is a satirical website developed for personal amusement and with no malicious intent at all. If you are offended by what you see or read here please contact the authors who will sincerely apologize and bake you cookies...even if you're a Yankee.